Investment Clubs

Reaching Out for New Members

Let’s face it. Your fellow investment club members aren’t going to stick around forever. Hey, we’re not here to pass judgment — there are lots of reasons why folks drop out of clubs. People move away or go through changes in work or family responsibilities that make it harder to stay involved. Sometimes, they simply lose interest.

No matter the reason, your club will likely see its member roster dwindle as the years roll by.

If this continues unchecked, you may even lose so many members that the club has trouble functioning. OK, we admit this sounds a little scary, so let’s balance that bit of doom and gloom with some good news: Your club can avert this potential calamity by making a deliberate effort to improve its recruiting tactics. Although this advice may seem simplistic, we promise it’s true. A vibrant recruitment program that actively seeks and then welcomes promising prospects should ultimately result in new members who can help keep your club running productively. Now doesn’t that sound a whole lot better than a total club collapse?

If you’ve never really given much thought to an organized recruiting plan — and you wouldn’t be the only one who hasn’t — you might be a little clueless about how to start. We suggest beginning with the most important part of the process: finding people who might be interested in joining. But just where should a club go to look?

The most fertile source of new members is often the circle of friends and family surrounding your existing members. Reaching out to people at your work, school, house of worship or community activities ensures you’ll already have at least one common connection and it’s that connection that helps keep members emotionally as well as financially invested in a club’s success.

“All of our members have joined as a result of another member bringing a friend or acquaintance to the meeting,” says Gloria Mankonen of the WIN Club of West Virginia. “Some come through work, but mostly they are friends of members who have told them about the club.” Her 13-year-old club has welcomed 10 new members in the past 11 years and recently celebrated reaching a “One-Eighth Million Portfolio” — which, as Gloria explains — “sounded like so much more than saying $125,000!”

Henri Russell of the Women With Cents Investment Club in Granbury, Texas, agrees. “We are always on the lookout for new members,” she says. “Mostly, we just talk to friends and people we meet whom we think would be a good fit into our group.”

Henri also believes that a personal connection to potential members gives a better glimpse into the type of member they’ll be.

“We don’t want to just add people for the sake of having another member,” she says. “We want people who are excited about joining and learning about investments and who are willing to work toward our goals.”

Some clubs take this “know your fellow members” idea to the extreme, forming clubs comprised only of family members or co-workers. All members of the 7-year-old Lunch Money Investment Club of Dearborn, Mich., for example, are either employees or contractors of Ford Motor Co. The club meets at work during lunch one day a month and when it’s time to look for new members, the process is as easy as making a few photocopies.

Member Bob Mann explains: “About once or twice a year, we post fliers in the various buildings where we work. The fliers discuss how we invest for the long haul and that no experience is necessary.” Ford employees are invited to an information session about BetterInvesting and its methodology, then to more in-depth investment training sessions if they decide to join the club.

Once potential members apply, they must attend three meetings and learn to prepare a Stock Selection Guide before the club makes a membership vote. “The three meetings give both sides a chance to try the other out,” Bob says. “Since we are in business together, we don’t want personality clashes!” A common employer can also mean flexibility for club members, Bob reports. “We allow for work-related issues that can cause people to be absent through no fault of their own, like being in Mexico for six months.”

The 52 Week High Investment Club of Phoenix recruits mainly from friends of members. One benefit of this is that when new members and current members are already friends, the mentorship process is a far more congenial one.

“The new partner is mentored by the person who brought them to the club,” member Bill Peterson says. Among his additional advice for those bringing in new members, he recommends you “try not to overwhelm the prospective partner with information upfront, but do make it clear what you expect.”

These days, “social networking” has a new meaning: using online communities and sites such as Facebook and Twitter to help keep up with your friends. Chris Johnson of the Southeastern Michigan Model Club of Madison Heights, Mich., is a regular Twitter and Facebook user, and he often posts updates when doing stock research or preparing for a club meeting.

Using these social media channels “hasn’t had any impact yet on club recruitment,” Chris says, “but I hope that by keeping the idea in front of my friends, some of them may eventually be intrigued enough by the idea to consider joining our club.”

If you’ve struck out finding new members among your family, friends, co-workers and online contacts, BetterInvesting offers some valuable options to consider. Many regional chapters hold regular educational programs, presenting a great opportunity to talk to lots of people you already know have an interest in investing. If your chapter runs a model investment club, go to a few meetings and chat up other visitors. Chances are at least one of them is looking for a club to call his or her own. And don’t forget BetterInvesting’s Find-A-Club Program, a matchmaking-type service for bringing interested clubs and potential members together. Bill Peterson’s 52 Week High Investment Club has already signed up for the program and hopes to find some enthusiastic prospects soon. (Contact your chapter to see whether it’s participating in the program and for more details.)

Regardless of how you find your potential new members, most current club members can agree on one thing: the importance of screening them in some way before the club votes on membership. This often involves a probationary process in which the potential member attends meetings or educational sessions.

In Gloria’s West Virginia club, potential members attend two meetings in a row and become a member on the third meeting. The club relies on the member who brought in the potential recruit to do the initial screening, but all members participate in welcoming and encouraging new partners. “If you want to keep a member once they’re in,” she advises, “you need to involve them in the club and make them feel as if they’re part of the group.”

Henri’s Texas club takes a formal approach to mentoring. “When new members come in, we immediately start to mentor them in stock definitions, ways to research, help on using the Internet if they need it and important things to look at when researching a stock,” she says.

This personal interest is essential in ensuring your shiny new members stick around. You want them to enjoy their investment club experience as much as you want them to learn to invest, right? Just because you’re all doing business together doesn’t mean you can’t have some fun, too.

“I think one of the main reasons we have stayed together is because we do quite a lot of communicating with each other between meetings, mostly by e-mail,” Gloria says. “We have become friends. We also celebrate when we reach special goals. We got all dressed up and reserved a room at a restaurant and had a party with a cake and favors when we reached our 10-year anniversary.” It’s this sort of attitude that helps attract new members — and keep them.

Allow us one final bit of advice as you craft your club’s recruitment plan. Don’t wait until you get to a dangerously low number of members. Instead, start up an ongoing effort to identify, invite and admit new partners. Create an enticing introductory letter or packet, then keep it handy to share with anyone who shows an interest. Engage all your club’s members in the recruitment process to increase your chances at bringing in some wonderful new people.

If you set an expectation that each partner should invite at least one new person to attend a club meeting each year, you’ll likely find yourself with a bevy of possibilities. Remember that it’s up to each member to join in the effort — your club’s very survival might be at stake. And really, who wants to get the blame for that?

Angele McQuade of New York state is the author of Investment Clubs for Dummies (Hungry Minds, 2001) and Introduction to Successful Investing Handbook.

Douglas Gerlach is author of The Complete Idiot's Guide to Online Investing, The Armchair Millionaire, and Investment Clubs for Dummies.